The Emerging East Africa Construction Market 2015

Nicole Dsouza |
November 29 , 2015

undefinedEast Africa is fast becoming a key market for the construction sector and forecast to present massive opportunities over the next few years. Most countries in East Africa are likely to continue to grow at a healthy pace of 6 per cent and above during 2015 and beyond driven by improved performances in the agricultural, mining, tourism and industrial sectors, according to the United Nations.

Kenya, Tanzania and Mozambique are the fastest growing economies in the region with substantial investments in infrastructure and construction sectors.

Kenya’s long-term development blueprint is called Vision 2030 and it aims to transform the country into a newly industrialising, middle-income country that provides a high quality of life to all citizens by 2030. It is made up of successive five-year Medium Term Plans (MTPs).

The latest plan (2013-2017) aims for an economic growth rate of 10 per cent each year. Its priorities include infrastructure development, investing in agriculture, poverty reduction and social protection, governance and public financial management reforms and improving security among others.

Kenyan government has planned a complete revamp of road, rail and port transport infrastructure including expansion, development, and modernisation of roads, rail, ports and other transport infrastructure. The cost of infrastructure projects under the current MTP is estimated at $2.89 trillion (KES246trn).

Ethiopian government has also embarked on an ambitious plan for the period 2010 to 2015. According to a report by Access Capital, the country is forecast to provide construction opportunities worth $20 billion annually based on the projects it has laid out for implementation over the next few years.

Oil discoveries in Juba, South Sudan, Uganda and Kenya as well as gas deposits found off the coasts of Tanzania and Mozambique have turned East Africa into a focal point for exploration and investment. Within the oil and gas sector alone it is estimated that $60bn to $70bn needs to be invested in infrastructure in the East African region, according to analysts.

Tanzania’s Bagamoyo Port is currently the largest investment in the region. The second largest project is Mombasa to Mabala Standard Gauge Railway Line.

Other significant projects include the Ethiopian Renaissance Dam ($4.2bn), Addis Ababa-Djibouti Railway ($3.3bn), LAPSSET (Lamu Port-South Sudan-Ethiopia Transport Corridor) Project ($3.3bn) and Ugandan Farm-down Geothermal Plant ($2.9bn).

Uganda is raising capital of $8bn for a standard gauge railway is in the Nairobi Mombasa Railway project. Kenya is also in the process of developing an annuity finance project for a 10,000km road development and maintenance programme.

A report by Deutsche Bank said that Mozambique has 18 large infrastructure development projects valued at more than $24 billion currently under construction and the investment is set to reach $32bn. According to the IMF, the huge energy investments in the country would require nearly $24bn of supporting infrastructure investments for which around $4bn could be annually invested by international companies from 2014-19.

dmg events, organisers of The Big 5 events in the Middle East and Asia, has announced the launch of The Big 5 Construct East Africa to cater to the expanding regional construction sector. The inaugural event will be held with the support of the Kenya Investment Authority from November 2 to 4, 2016 at the Kenyatta International Conference Center in Kenya’s capital Nairobi. 

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The Big 5 series of shows will launch its The Big 5 Construct East Africa next year in Nairobi, Kenya from November 2 to 4 at the Kenyatta International Conference Centre. Find out more here

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